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BUILDING THE NEXTPROFITABLE GOLD MINE IN BRAZIL
Corporate PresentationJanuary 2019
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TSX.V: AGCOTCQB: AGCBF
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FORWARD-LOOKING STATEMENTS
These presentation materials (“the Presentation Materials”) are being supplied to you for information purposes only on Amarillo Gold Corporation (the “Company”). These Presentation Materials have been prepared by and are the sole responsibility of the Company. The Company has taken all reasonable care to ensure that the facts stated herein are true to the best of its knowledge, information and belief.
These Presentation Materials are being distributed only to and are directed at (a) persons who have professional experience in matters relating to investments being investment professionals as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (the “FPO”), (b) high net worth companies, unincorporated associations and other bodies within the meaning of Article 49 of the FPO or (c) persons to whom it may otherwise lawfully be communicated (together “Relevant Persons”). Any person who is not a Relevant Person or who does not have professional experience in the matters relating to investments should not act or rely on this document or any of its contents.
These Presentation Materials do not constitute, or form part of, a prospectus relating to the Company, nor do they constitute or contain any invitation or offer to any person to underwrite, subscribe for, otherwise acquire, or dispose of any shares in the Company or advise persons to do so in any jurisdiction, nor shall it, or any part of it, form the basis of or be relied on in any connection with any contract. No reliance may be placed for any purpose whatsoever on the information or opinions contained in this document or on its completeness and no liability whatsoever is accepted for any loss howsoever arising from any use of this document or its contents otherwise in connection therewith. Prospective investors are encouraged to obtain separate and independent verification of information and opinions contained in the Presentation Materials as part of their own due diligence.
By accepting these Presentation Materials, the Recipient agrees that the information contained herein or sent herewith or made available is for information purposes only. Without prejudice to the foregoing, neither the Company, nor its advisers nor its representatives accept liability whatsoever for any loss howsoever arising, directly or indirectly, from use of this document or its contents or otherwise arising in connection therewith.
The distribution of these Presentation Materials in certain jurisdictions may be restricted by law and persons into whose possession these Presentation Materials come should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws of any such other jurisdictions.
Some statements contained in these Presentation Materials or in documents referred to therein are or may be forward-looking statements. Actual results may differ from those expressed in such statements, depending on a variety of factors. Past performance of the Company or its shares cannot be relied on as a guide to future performance. Any forward-looking information contained in these Presentation Materials has been prepared on the basis of a number of assumptions which may prove to be incorrect, and accordingly, actual results may vary.
The Qualified Persons for Amarillo are Frank Baker, M. IOM3 and MAusIMM., and Mr. Mike Mutchler, FAusiMM.
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AMARILLO GOLD OVERVIEW
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MARA ROSA DEVELOPMENT PROJECT GOIAS STATE
1.1 M oz. in pit gold reserves at 1.42g/t
2K hectares of mining concessions on 8 km trend
Located near Chapada (Yamana), Pilar (Leagold),
and Crixás (AngloGold) gold mines
15K meter drilling program underway - potential
to increase the reserve and resource down dip
and along trend
Outstanding Project Economics: NPV 5% US$244M;
A/T IRR of 51%; 2.6 yr Payback at $1,300/oz gold
Overwhelming central government and local
community support: received the Preliminary
License (LP) which is the environmental and social
license
Will apply for License to Install (LI) mid 2019
Fast track to production - first gold expected in 2021
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LAVRAS DO SUL EXPLORATION PROJECT RIO GRANDE DO SUL STATE
Numerous 17th century gold producing workings
Pursuing 22 targets along a 100 km trend
22,000 Hectares of exploration concessions
523,000 oz. resource defined on Butia target
SIGNIFICANTLY UNDERVALUED
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0.52x 0.52x 0.50x 0.49x 0.48x 0.48x0.43x
0.29x0.23x
0.15x0.10x
Orla West African Sabina Victoria Continental Equinox Dalradian GoldQuest Belo Sun INV Metals Amarillo
Average: 0.41x
Source: Capital IQ; Street research as at May 14, 2018
$380$161
$143 $129$110
$68$46
$26 $25 $24 $19 $18 $12
Equinox West African Continental Dalradian Sabina Orla Condor GoldQuest Amarillo Victoria Belo Sun African Gold INV Metals
Average: $95/oz
NAV MULTIPLE VS PEERS
EV/OZ OF RESERVE VS PEERS
IDEAL PLACE & TIME TO BUILD A MINE
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Chart courtesy of GoldCorp AmarilloCommences
Production
RECORD GOLD PRICES IN BRAZILIAN REALS 20 YEAR CYCLE FROM DISCOVERY TO PRODUCTION
MARA ROSA RESERVES AND RESOURCES
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Notes
1. Posse Deposit Resource @ 0.20 g/t cut-off
2. Source: Keith Whitehouse Member of the AUSMIM Qualified person Australian Exploration Field Services; 43-101 Technical Report: prepared by SRK Consulting, September 2018 titled “Technical Update on the Posse Gold Project, Brazil, September 2018”
Notes
1. SRK applied a variable g/t Au cut-off to the block model
2. Dilution: 3% mining & 3% handling
3. All Mineral Reserves prepared by Anthony Stepcich, FAusIMM(CP), of SRK Consulting (Australasia) Pty Ltd have been estimated in accordance with Canadian Institute of Mining and Metallurgy and Petroleum (“CIM”) definitions, as required under National Instrument 43-101 (“NI43-101”).The 43-101 Technical Report prepared by SRK September 2018 titled “Technical Update on the Posse Gold Project, Brazil, September 2018”
4. Due to rounding all numbers may not sum
CATEGORY TONNES Mt GRADE g/t OUNCES OF Au
Measured 12 1.40 560,000
Indicated 19 1.20 710,000
Resource M&I 31 1.30 1,270,000
Inferred 11 0.92 330,000
CATEGORY TONNES Mt GRADE g/t OUNCES OF Au
Proven 9.6 1.65 513,000
Probable 14.2 1.26 574,000
P&P Total 23.8 1.42 1,087,000
MARA ROSA POSSE CROSS SECTION (LOOKING NORTH)
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HIGHLY CONSISTENT GRADES WITHIN PIT
LOW CAPEX AND OPERATING COSTS
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CAPITAL ALLOCATION (M USD)
Mine Contractor 3
Plant, Equipment & Facilities 84
Tailings Dam 9
Infrastructure & Buildings 11
Contingencies 9
Working Capital 8
Total Upfront Capex 123
September 2018 PFS (US $1,300/oz Au)
Upfront Capex (USD) 123M
Sustaining Capex (USD) 17M
Years 1-4 Average Production (oz) 144,000
Average Annual Production (oz) 123,000
Initial Mine Life (years) 8
Operating Cost per Ounce (USD/oz) 545
AISC per Ounce (USD/oz) 655
Mineable Reserve (oz) 1,087,000
Due to rounding all numbers may not sum
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MARA ROSA ROBUST PFS ECONOMICS
DISCOUNTED CASH FLOW SENSITIVITIES
USD/Au oz $1,000 $1,100 $1,200 $1,300 $1,400 $1,500
A/T IRR 23% 33% 42% 51% 59% 68%
NPV 5% (After-Tax M USD) $91 $144 $194 $244 $295 $345
NPV 5% / Share (CAD)* $0.89 $1.41 $1.89 $2.38 $2.88 $3.37
Payback (Years) 4.2 3.3 2.8 2.6 2.4 2.3
* CAD/USD FX of 1.3; Fully diluted shares 133.1M
MAJOR PERMITTING MILESTONES
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))((999999
Public hearing held in 2016 demonstrated overwhelming community support
The main Preliminary License (LP) granted in May 2016
STEP 1APPROVEDPRELIMINARY LICENSE (LP)
STEP 2IN PROGRESSINSTALLATION LICENSE (LI)
STEP 3FINAL INSPECTIONOPERATION LICENSE (LO)
• Most important part of the permitting process
• Entails environmental baseline studies, social and environmental approval with public hearings
• Awarded by the EPA and the Judicial Ministry
• Provides authorization to initiate construction
• Expect to apply after feasibility study in mid 2019
• Allows for construction and commissioning
• Granted after commissioning
• Requires inspection of the constructed mine and plant to ensure compliance with codes and provisions of LP, LI
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MARA ROSA DEVELOPMENT SCHEDULE
Q1 2018
Q2 2018
Q3 2018
Q4 2018
Q1 2019
Q2 2019
Q3 2019
Q4 2019
Q1 2020
Q2 2020
Q3 2020
Q4 2020
Q1 2021
Q2 2021
Q3 2021
Q4 2021
Whittle Optimization Study / Update PFS
Infill & Exploration Drilling
Resource Update
Feasibility Study
Basic Engineering
Installation License
Construction
Commissioning & Ramp Up
Commercial Production
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MARA ROSA UPSIDE BEYOND RESERVES
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MARA ROSA SIGNIFICANT EXPLORATION POTENTIAL
POSSE TRENDStrong Anomalies over an 8 km trend
Radiometric
Magnetic
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MARA ROSA AREA EXPLORATION CONCESSIONS
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LAVRAS DO SUL PROJECT
100 km trend along granite intrusion perimeter
Rio Tinto and IAMGOLD both have back in agreements if Amarillo reaches 7M & 3M oz respectively on grounds optioned from both
Ongoing soil sampling and geological mapping on several propertiesConducting an airborne magnetic survey on Butia, Caneleria and Zeca Souza targetsInitiating Environmental baseline study at Butia
BUTIA120 m @ 3.23 g/t 232 m @1.95 g/t
I&I 523K/oz
PAREDAO12m @ 4.54 g/t
CANELEIRA37m @ 1.17 g/t
CERRITO135.5m @ 0.85 g/t113m @ 1.02 g/t 210m @1.04 g/t
OVER 22 ADVANCED TARGETS(with highlighted Au drill results)
Old Gold Workings
Digital elevation in grey, roads in black. Colour image: airborne magnetics showing geology and structure.
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CORPORATE SUMMARY
SHORT TERM GOAL
To fully permit and build Mara Rosa into a profitable gold mine with minimal shareholder dilution
LONG TERM GOAL
To use the cash flow from Mara Rosa to grow our resources through exploration in Mara Rosa and Lavras do Sul areas
NEW LEADERSHIP
History of success in project development, operations management and business turnaround in Canada and Latin America
• Invested over $4M CAD in 2018
Near Term Timelines / Catalysts
• 15K meter exploration drilling program is nearly complete
> In-fill drilling to convert Inferred Resources into Measured or Indicated Resource to extend mine life to 10+ years
> Step out drilling along trend and down dip to further expand the resource
• Beginning of Definitive Feasibility Study late January 2019
• Resource Update in February 2019
• Application for License to Install (LI) mid-2019
• Receipt of LI late 2019 to early 2020
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CAPITAL STRUCTURE – SHARE INFORMATION
* As of January 7, 2019
CAPITAL STRUCTURE
Stock Listings TSX.V – AGCOTC - AGCBF
Current Share Price (C$)* $0.28
Shares Outstanding 114.5M
Warrants (C$0.38)Options (C$0.29)
9.8M8.8M
Market Cap. (c$)* $32M
No Debt
Cash @ December 31, 2018 (C$) $2.2M
MAJOR SHAREHOLDERS
Board & Management 11%
InstitutionsMackenzieGabelliManulifeIG Investment Management
46%
High Net Worth 23%
Retail 20%
ANALYST COVERAGE
Mackie Research CapitalStuart McDougall Initiated Coverage August 16, 2018 with one year Target Price of $0.80
NEWSLETTER WRITER COVERAGE
Jay Taylor – Gold, Energy and Tech Stocks Mark Turner – The IKN Report
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MANAGEMENT TEAM
ROLLY ULOTHExecutive Chairman
Mr. Uloth is President of Rosedale Transport Limited, which he co-founded in 1969, and was the President & CEO of Wesdome Gold Mines from May 2007 -December 2009 and from August 2013 - August 2016. He has been a Director of Wesdome from 1999 to 2009, serving as Chairman from 2006 to 2009, and from August 2013 to present.
HEMDAT SAWHChief Financial Officer
Mr. Sawh is a CPA, and holds an MBA, a BSc in Geology and a graduate diploma in Geology. Mr. Sawh has over 16 years of experience at Grant Thornton LLP, where he acted as lead supervisor for auditing teams. Mr. Sawh has over 13 years’ experience serving as CFO of Wesdome Gold, Scorpio Mining, Crystallex and Goldbelt Resources.
MIKE MUTCHLERPresident and Chief Executive Officer
Mr. Mutchler, a fifth generation miner, was previously a Partner at Whittle Consulting Pty. Prior to Whittle, he was COO for Largo Resources where he was responsible for successfully building a Vanadium Mine and Mill in Brazil. Mike was COO of Rainy River Resources concluding with the sale to New Gold.; V.P. Project Development for Kinross Gold, Mine Manager for Kinross’s Cerro Casale project in Chile, Project Director for Kinross’s Paracatu Mine in Brazil, and held managerial positions at Kinross and ASARCO. Mike holds a BSc (Mining Engineering); MBA, Executive Juris Doctorate degree, and Chartered Directors Certificate.
ARAO PORTUGALDirector of Government Relations
Mr. Portugal was instrumental in securing the main Preliminary License (LP) for Mara Rosa. He has held various administrative roles including Country Manager for Yamana Gold.
FRANK BAKERProject Manager
Mr. Baker has a Masters in Metallurgy and over 40 years of experience in the mining industry. He has successfully designed, built and commissioned five gold plants, including two in Brazil.
LUIS DA SILVAGeneral Manager
Mr. da Silva has over 20 years of administration and exploration experience in Brazil. He was responsible for the discovery of Pilar, Zone A, Zone B and Serra Paraíso of Jaguar Mining’s Brazilian gold deposits.
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BOARD OF DIRECTORS
COLIN SUTHERLANDDirector
Mr. Sutherland is a CPA with over 20 years financial and operational experience. He last served as President of McEwen Mining. As a former CEO of Archipelago Resources, he led the privatization and delivered significant returns for shareholders. Mr. Sutherland has also held senior financial and executive roles with Timmins Gold, Capital Gold, Nayarit Gold and AuRico Gold.
DAVID BIRKETTDirector
Mr. Birkett is Pres. & CEO of Stratus Aeronautics, dedicated to UAV development. Mr. Birkett was the President of Alton Natural Gas Storage LP and Alton Natural Gas Storage Ltd . Mr. Birkett was President of Landis Energy Inc., a publicly traded company, until it was acquired by Alta Gas in 2010. He served as a Director of Moss Lake Gold Mines until it was acquired by Wesdome Gold . He has over 25 years experience with public companies in the areas of corporate development, management, finance and exploration.
ROSTY RAYKOVDirector
Mr. Raykov has served as a director of Fennec Pharma and CEO since 2009. He has also served on Board of Wesdome Gold Mines from 2013-2016.
He was the co-founder of Alchem Investment Partners and prior to that a portfolio manager for Purchase Associates fund at John Levin & Co. and analyst for Arbitrage Associates, LP at Tiedemann Investment Group. He began his career as a financial analyst in the natural resources group at Bear Stearns.
ROLLY ULOTHExecutive Chairman
See previous page for description.
STEPHEN STOWDirector
Mt. Stow was former President & CEO of Odin Mining & Exploration. Currently Principal of Zen Capital & Mergers Ltd since 1996, Mr. Stow has been an adviser, investor, and executive engaged in various resource driven opportunities, start-ups and has global executive experience in management of public companies.
MIKE MUTCHLERPresident and Chief Executive Officer
See previous page for description.
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WHY BUY AMARILLO NOW?
New management team has restructured the balance sheet• $5.2M CAD raise March / April 2018• USD $10.8M NSR sold to Royal Gold in June
> Royal Gold due diligence is a strong endorsement for the project• Retired the gold loan in July 2018
• Debt free• $2.2M in treasury
Advancing the project> 15K meter drilling program ongoing> New resource in February 2019> Feasibility Study started in January 2019> Applying for License to Install (LI) mid-year 2019
Expect a re-rating to occur soon• Currently trading at .10x to NPV5% @$1,300 Au (.13 @$1,200) & $23 per ounce of Reserve• Peers trade at .41x and $95 per ounce• AGC share price can triple or quadruple and still be in range of our peer group
CONTACTS
MICHAEL MUTCHLER
President and CEOTel: [email protected]
KAREN MATE
Director of CommunicationsTel: [email protected]
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TSX-V: AGCOTCQB: AGCBF
